The Housing Bubble

The North County Times reports from California. “Laura Lovell had a new home to raise her four children and every amenity she could want. But after the housing downturn left her husband unemployed and prevented the sale of their home for more than what they owed, Lovell was caught up in a foreclosure crisis that has swept through this city. She said the bank sold the home for $327,000, 32 percent below the original listing price of $480,000.”

“‘Everyone thinks these foreclosures must be people who just come in, living rent-free for six months,’ Lovell said. ‘Who’s actually losing their houses is not those people. It’s people who bought houses they could afford and had the housing industry take everything.’”

“In 2007, one of every nine Murrieta homes entered foreclosure, according to RealtyTrac and the Southern California Association of Governments. For every non-foreclosed home for sale, there are about three and a half homes in, or in serious danger of, foreclosure.”

“A full 80 percent of the area’s 35 December home sales were bank-owned homes the result of foreclosure. More than half of the month’s sales, 66 percent, sold for more than 10 percent below the original listing price. One home sold for 36 percent lower than the original listing, a $172,500 freefall.”

“‘In one word: terrible,’ said Barbara Baker, a real estate agent in Murrieta. ‘It makes it impossible for someone with a job offer elsewhere to get fair market value. It’s awful. I’ve been here since 1980 and I haven’t seen it this bad.’”

“Oceanside’s Ben Leau said he bought his home in 2000 for $283,000. He secured a loan with a two-year teaser interest rate.”

“Before the rate increase, he got another two-year teaser. After two more years, he refinanced again and again until he refinanced for the fourth time in 2005 for $414,000.”

“Leau said he put no money down on his home, paid no closing costs and estimates he has netted about $50,000 in cash from refinancing. He used the money to pay off $8,000 in debt and fund a vacation to Hawaii.”

“‘He said he can’t remember which lender he most recently refinanced with, only that it was one from a slew of mailings.”

“I called up and said, ‘I want to refinance.’ (The loan officer) said, ‘How much do you want?’ I said ‘I want $30,000.’ He said, ‘Do you want more?’ ” Leau said.

“He said he is not worried about the pending auction of his home and that he was excited about the possibility of renting a bigger, nicer house.”

“Unlike Leau, Fong Noimanivone in Murrieta is fighting off the foreclosure process and said she has not been affected by interest rate increases. She is stretching her monthly budget to make payments on her 30-year fixed interest rate mortgage because of her tenants’ failure to pay rent on investment homes she owned and has since lost to foreclosure and short sales in Arizona.”

“‘We have to cut down a lot on everything, on groceries, on gas,’ Noimanivone said. ‘We can’t go anywhere except to work and home, that’s it.’” “She said that since she bought her home two years ago for $680,000 and homes in the area currently sell for $420,000, she now owes more than the home could be sold for, forcing her to look at a short sale.”

“Noimanivone is in trouble, in part, she said, because of 100 percent financing. ‘(Homeowners) were overencumbered to begin with, with these zero-down loans,’ Baker said. ‘And when the values dropped, not only do you have zero equity, you’re at the very bottom of the totem pole.’”

“It was standing-room only at the San Diego Convention Center as the Real Estate Disposition Corp. auctioned about 200 bank-owned properties. But auction veterans said few of the homes or condominiums sold at significant discounts.”

“‘It’s just a sprinkling of deals,’ said Brian Crisp, a broker in San Diego. ‘The problem is you have no negotiation here. It’s take it or leave it. And unless you visit these properties before, you have no idea what you’re getting.’”

“Sammuel Mireles placed the $170,000 winning bid on a two-bedroom Chestnut Street home in Escondido. The corporation hosting the auction adds a 5 percent premium, so Mireles can buy the 850-square-foot home for $178,500, a savings of 44 percent off the original listing price of $319,900.”

“But the bank that owns the property has the option to refuse bids it considers too low.”

“Mireles, a carpenter, said he plans to fix up the home and possibly add another bedroom to accommodate his wife and three kids. He currently rents an apartment nearby. ‘We’ve been looking to buy a house for two years, but prices were too high,’ Mireles said. ‘Now, I’m satisfied. It’s a house for under $200,000 in Escondido.’”

“He bought the home without his wife present. She was less than thrilled about his decision because of the home’s quality, Mireles said, leaving him hoping she will warm to the idea after he starts renovating.”

“There was little slowdown throughout the day. Vats of coffee placed in the center of the massive warehouselike room and at the corners kept buyers buzzed as auctioneers rattled off home descriptions and started the bidding, averaging about 30 auctions an hour with no breaks.”

“‘You see people bid up to the previously sold amount,’ said Colleen Curtis, a San Diegan who has been to several auctions. ‘But those previous numbers are often from the peak. So they might be moving in and already be upside down.’”

“Rick Komisars, an Arizona resident who is looking to move or invest in San Diego real estate, said he expected the housing market to keep falling so he plans to wait at least six months.”

“‘This is just information and entertainment,’ Komisars said. ‘There’s a Jerry Springer feel to the whole thing.’”

The Union Tribune. “All aboard the REPO Express, a new kind of bus tour that takes riders on a guided search for bargains within San Diego County’s surging home foreclosure market.”

“Maria Bernacett, a teacher’s aide who owns a condo in National City, said she and her neighbors were recently shocked to see a repo-tour bus drive down their street.”

“‘It was scary,’ she said. ‘Our jaws just dropped. I thought, ‘What is this coming to?’”

The Recordnet. “The telephone began ringing at 6 p.m. Thursday and didn’t let up for the next two hours as eight members Financial Planners Association of the San Joaquin Valley offered free financial advice to callers. ‘This is the busiest we’ve been,’ said Teresa Mandella, a financial planner.”

“Christopher J. Olsen, a planner with Olsen and Associates, pointed to the current economic climate. ‘It’s a combination of recession, the stock market and foreclosures, all at the same time,’ he said.”

“Frank Mandella, owner of Meadow Lake Mortage handled many calls from people unable to meet rising mortgage payments or worried about falling home prices. ‘All the problems I dealt with tonight dealt with option ARMs,’ he said.”

“He also spoke to callers worried their home’s value had fallen below the mortgage balance, even though they could still afford the payments. That shouldn’t a concern as long as they want to remain in the home, he said.”

“‘You’ve got to have a roof over your head, don’t you?’ Mandella asked.”

The San Francisco Chronicle. “Early last month, the couple closed escrow on a $775,000 condo in Jackson Square, two blocks from the Embarcadero. A house at that price when they started looking six years ago would have cost them $1.3 million. Instead it cost them $711,000 - a difference of nearly $600,000.”

“‘It’s mind-boggling,’ said Kevin McCullough.”

“Real estate agents and developers report an increasing number of people from Canada, Asia and Europe, where some currencies have lapped the dollar, touring and buying San Francisco homes.”

“To what degree the foreign buying trend is occurring in San Francisco, and to what extent it could help the market, are both unclear. The city doesn’t track home purchases by nationality, and local agents give varying accounts of the frequency. Indeed, some say they haven’t personally seen any increase.”

“‘I know that there are a lot of sellers who want that to be true,’ said Malin Giddings, who specializes in upscale San Francisco real estate for TRI Coldwell Banker. ‘But we see very few foreigners buying.’”

The Sacramento Bee. “When the economy sours and gold soars, there’s one business segment that actually sees more traffic coming in the door. Welcome to the world of pawnbrokers.”

“‘The demand for loans is way up, because the economy stinks,’ said John Appelbaum of Sacramento Loan and Jewelry Inc. ‘We’re the grass-roots economic indicator. We see it right off the street.’”

“‘The myth is that people who come here are down and out, but it’s also the person with money,’ said Appelbaum, who’s been in business 36 years. ‘We get people needing to borrow $15 to (needing) thousands.’”

“Out in suburban pawnshops near the American River, the flood of pawned construction tools bears evidence of the area’s protracted housing slump. ‘You can usually tell (how) the economy (is doing) by how many tools we get in,’ said ‘KC’ Carvalho, of Carvalho’s Loan in Sacramento’s Foothill Farms area. ‘We now have more tools than we’ve ever had. Ever.’”

“Bill Dunbar, owner of Marconi Coin and Jewelry Exchange in Carmichael, is seeing more troubled homeowners coming in to unload their gold jewelry while bullion’s price is skyrocketing.”

“‘They’re trying to cover their houses. They’re trying to cover their kids in college. You’ve got this credit card thing. People are in trouble,’ said Dunbar.”

The Daily News. “Temporarily boosting the conforming loan limit to $729,000 from $417,000, or 125 percent of the median home price in a buyer’s area, is probably not enough to resuscitate our housing market.”

“That’s the trouble with housing markets. What works in one place won’t in others, and Southern California’s market is stressed.” ‘Lots of homes in the Long Beach, South Bay and San Fernando Valley areas remain out of reach for first-time buyers and for those looking to trade up - even with a higher loan limit.”

“‘The problem in the home market today has more to do with prices relative to income than anything else. The idea that this is an interest-rate phenomenon or capital availability (issue) is ridiculous,’ said economist Christopher Thornberg, a principal at Beacon Economics in Los Angeles and a member of State Controller John Chiang’s Council of Economic Advisors.”

“While it might become possible to get a conforming loan for a $729,000 house here, the buyer will have to adhere to the Fannie Mae and Freddie Mac rule that no more than 35 percent of the gross household income can be used for the mortgage.”

“‘What number of people could buy a home in this market, given where prices are and the 35 percent rule? Very few,’ Thornberg said.”

“To buy a $500,000 home in Los Angeles County requires a household income of a little more than $100,000, he said, and the median income here is a little less than $60,000.”

“Prices need to fall further to improve the affordability. But how far?”

“Thornberg says a 35 percent drop from this cycle’s high isn’t out of the question. ‘You say that’s outrageous? We’ve already gone (down) 10 percent. A lot of sellers are going to be underwater, and that’s going to be very painful for the market.’”

“So despite the big jump in the conforming limit, the housing market is going to have to get this poison out of its system. Thornberg thinks prices might not start rising again until 2011.”

The Press Enterprise. “The idea of paying $1 million to own a hotel room for two weeks a year while hoping tourists would rent the room the rest of the time seemed elementary a few years ago.”

“Hotel developers thought so, confidently predicting sell-out dates in front of city councils excited by the potential hotel taxes and cache of a five-star resort that would otherwise need funding help from city coffers.”

“Today, the crashing economy has sent most condo-hotel developments packing. At one time there were at least five large condo-hotel projects proposed in the Coachella Valley. None have been built.”

“The concept gained buzz in the Coachella Valley when Remington, a Dallas-based hotel management company, announced it would build its first $280 million resort in Indian Wells by selling 265 condos starting at $900,000. Owners would be able to stay in the condos no more than two or three weeks each year. That was back in December 2005.”

“Then they left, returning investor down payments and leaving the land just as vacant as when they arrived in Indian Wells.”

“‘It is not economical to build a brand-new luxury hotel from the ground up in conventional financing,’ said Robert Haiman, a senior VP with the Remington Hotel Corp., when he presented the project to the Indian Wells City Council in 2005. ‘Selling the units is critical,’ Haiman said.”

“Remington raised $28 million in the first 60-days of announcing the project in Indian Wells according to the online biography of the former project manager. Haiman’s assistant said by phone that everyone who had paid a deposit on one of Remington’s condos received their money back.”

“‘The days of doing an unbranded hotel and using it as a financing mechanism are over,’ said Francis Wong, CEO of the Genesis Hotel Development LLC based in Indian Wells, a hotel consultant and developer. ‘A condo-hotel is successful only if it works as a hotel first.’”

“Relying less on the ‘if you build it, they will come’ slogans and more on ‘if they’re willing to pay $1 million each, build it,’ hotel developers in 2005 and 2006 argued that the only way to pay for a luxury hotel was by selling individual rooms as condos.”

“The ground has hardly been broken for the proposed Hard Rock Hotel in Palm Springs, the city still owns one of the parcels the developers need and now there’s a lawsuit pending that claims the city gave too many concessions when it approved the plan.”

“‘A condo-hotel is not as valuable as a hotel,’ said Palm Springs City Manager David Ready.”

“A condo-hotel also became less economically feasible once the housing market soured, said Rob Eres, development manager for the hotel being built by Santa Ana-based Nexus Cos.”

“‘When the housing market was hot, it was a great way to finance hotels,’ Eres said. ‘All of a sudden, it doesn’t work a whole lot.’”

“Gone are the days when a developer could expect people to pay 10 percent down on a pricey condo they could only use for two weeks out of the year in some circumstances and walk into a bank with cash in hand, he said. ‘The party is kind of over,’ said Jan Freitag, VP with a firm that tracks hotel development, occupancy and rates nationwide.”

A report from the Coloradoan. “The number of city building permits pulled for new homes, duplexes and condos in Loveland dropped 37 percent in 2007, reflecting a national trend of a slumping home building industry. The 2007 numbers mark a dramatic 68 percent decline when compared with 2004, when residential building permits spiked to 923. ‘Business is way down,’ said David Keirns, owner of Keirns Construction Co. in Loveland.”

“Keirns maintained a steady number of new starts through 2006 until things began to slip in 2007, and now, that’s spilling into 2008.”

“‘Residential is doing the same thing here (in Fort Collins),’ said Delynn Coldiron, who compiles the permitting data for the city of Fort Collins. ‘The last couple years have been the sharpest decrease. There has been a pretty sharp decrease in single-family attached and detached.’”

“Home sales are at a 30 percent to 40 percent cancellation rate locally, meaning people want to buy up, but they can’t sell their existing homes, said Joe Knopinski, VP of neighborhood development for McWhinney Enterprises. ‘Our basic problem in Colorado is that people are interested in moving up (to a new home), but they are worried that they can’t sell their house,’ Knopinski said.”

The Arizona Republic. “Look for the downturn in metropolitan Phoenix’s home-building market to mirror the run-up of a few years ago. So the difference between the spike during the boom and the slowing now will be similar.”

“Housing analyst RL Brown said the build-up of new-home inventory through speculation and home-buyer cancellations will cut into future building this year ‘beyond.’”

“‘It has been a long time since we last had to deal with a market disrupted by inventory overages and low consumer confidence, a market where populations weren’t almost standing in line to buy new and resale homes,’ Brown said.”

“‘The five-year builder lot strategy has turned into a humbling nightmare,’ Brown said. ‘Bonuses have gone. Wink-wink financing is no more. Local governments are panicked as revenues from growth vanish. Appraisals are very problematic. The ‘my home ATM’ has closed. Cold realty is at hand.’”

“Brown said he, the industry and in some cases even the Federal Reserve had to learn some new words during the past year. Risk: It ‘denotes a potentially negative impact on an asset’ and ‘tends to be ignored during periods of euphoria,’ he said.”

“Market value: ‘The price an asset would trade at a pure auction or garage sale.’ Appraised value: ‘This is a term that has become really problematic in today’s environment.’”

“Scottsdale’s last major planned community is continuing to build and sell new homes, although the pace is slower than what might have been expected a few years ago. In the past year, Toll Brothers has sold 176 homes at Windgate Ranch.”

“That is nearly 30 percent of the roughly 600 homes planned for the community that borders the McDowell Sonoran Preserve.”

“‘People are worried about selling their home and getting the equity out of it,’ said Mark Bailey, a Toll Brothers assistant VP. ‘Nobody is objecting to the pricing.’”

“The smallest homes at Windgate start at $636,975, or about $277 per square foot. The base price for the largest models is $1.5 million, or about $238 per square foot.”

“Toll has indefinitely suspended construction of its 62-unit townhouse project downtown. But the company continues work on its 6-story condominium there and is still building at Windgate Ranch.”

The East Valley Tribune from Arizona. “In the first few weeks of January, the number of properties entering foreclosure shot past the number of Valley home sales during the same period. About 4,000 properties entered the foreclosure process, and nearly 1,600 others were actually foreclosed on, compared with roughly 2,600 sales of new and existing homes, according to Information Market.”

“It’s not a pretty picture, said Tom Ruff, a partner at the Glendale-based company. ‘You have declining prices,’ he said. ‘That’s what’s causing it. No equity, no options.’”

“In 2005 and 2006, Valley homebuyers took out 244,839 mortgages, 36 percent of which had adjustable rates, according to Elliott D. Pollack & Co. Nationwide.”

“In the past, relatively few homes that entered foreclosure proceedings were actually foreclosed on, Rounds said. Today, only 20 percent of homes that enter the process are being rescued from foreclosure, said said Jim Rounds, senior VP of the Scottsdale-based company.”

“Then there’s the massive oversupply of homes for sale, which could take three to five years to work off with a potential 10 percent further drop in home prices and more job losses to come in the local construction industry, he said.”

“During the boom, anyone with a pulse could get a loan, said Warren Potter, senior loan officer with Indymac Bank. ‘Obviously, that was a recipe for disaster,’ Potter said.”

“Many are also watching what’s going to happen in the larger economy, Potter said. ‘If you don’t know if you’re going to be laid off next week, you’re probably not going to be interested in buying a house no matter what the price,’ he said.”

“Real-estate investors‘ headaches can be bargains for people looking to rent in the Southeast Valley fringes. Rental rates on single-family homes in outlying areas of Queen Creek, Maricopa, portions of East Mesa and far southeast Chandler and Gilbert are falling thanks to a poor housing market, abundance of investor-owned houses and high vacancies, local experts say.”

“Three area property managers said some are as low as half what monthly mortgage payments would be on identical homes, and tenants are successfully haggling over rates and lease terms.”

“Steve Urie, owner of Mesa Verde Property Management in Gilbert and a Gilbert Town Council member, said many investors are charging low rents and heavily subsidizing the cost of their properties just to get some help with mortgage payments and avoid foreclosure.”

“All three property managers said they have known investors who collected rents but did not make mortgage payments, a practice that eventually forced the tenants out when the property went into foreclosure. Security deposits paid directly to property owners are also often at risk in foreclosures, the managers said.”

The Arizona Daily Star. “For a couple of months, Miguel León has watched the parking lot at his Midvale Park apartment complex empty out. ‘The parking lot used to be full all the time. Now there’s a lot of empty spaces,’ he said.”

“A lot of apartments are empty, too — a likely indicator of the growing impact of Arizona’s new employer-sanctions law. The departure of foreign workers to other states and to Mexico has combined with the declining housing market to increase vacancies, apartment management executives said.”

“On top of that, the housing slump has increased the supply of rental homes, making them more competitive with higher-end apartments. The slump also has meant fewer jobs for construction workers who might rent apartments”

“The vacancy rate on Tucson’s South Side jumped to 11.9 percent in the fourth quarter of 2007, up from 7.1 percent a year earlier, according to Phoenix-based RealData Inc.”

“Construction worker Julio César Castaños said he has seen a lot of people leaving Tucson to go back to their hometowns in Mexico. Castaños said people leaving have no plans to come back.”

“‘Because of the new law, companies are asking for Social Security numbers, so people have started noticing they can’t get jobs easily, and they prefer to leave,’ he said. He also has noticed workers leaving their apartments without giving notice, he said.”

“‘Besides, people don’t have money to pay the rent because there are no jobs,’ he said. Castaños has lived in the U.S. for eight years, but he is also planning to return to Mexico if the construction industry doesn’t pick up.”

The Yuma Sun from Arizona. “Ron Codling, owner of Kirstin’s Southwest Decor in Yuma, said the economy could be better and they are not getting the crowds they previously had. ‘The housing industry has taken a dive and it’s difficult to get loans now,’ Codling said.”

“In 2006, 800 homes were built in Yuma while only 300 were built last year. One reason fewer homes sold last year could be attributed to speculators who bought them as an investment and that market became saturated, explained Randy Crist, spokesman for the city of Yuma Department of Community Development.”

The Daily Courier from Arizona. “Four groups representing the public and private sectors and nonprofit organizations suggested pblic/private partnerships, higher density and other proposals can help to create more areas for affordable housing for police officers, firefighters, nurses and other people with average incomes.”

“The gathering drew 40 people to the Quailwood subdivision…that housing experts would not consider ‘affordable.” Home prices at Quailwood, in eastern Prescott Valley, range from $201,400 for a 1,619-square-foot, two-bedroom model to $392,400 for a 3,076-square-foot, four-bedroom house, according to literature from the sales office.”

“However, a number of the models are less than the median home price for Prescott of $319,000 for 2007, according to a report from the Governor’s Housing Forum this past September. The report states that a person would need to earn $48.68 an hour to afford the house.”

“The median income for a family of four is $50,000 a year in the county, Kathern Mitchell, executive director of Choices AZ Inc. in Prescott, said during the meeting. Mitchell said she was ‘really excited’ about the number of people who attended. ‘I think the right people were here,’ she said.”

The Arizona Daily Sun. “Mirroring a national trend, house sales in Flagstaff have not just stalled but gone into hibernation. There were just 44 sales of single-family homes in the city listed by the Northern Arizona Association of Realtors. That’s down 25 percent from the same month year ago and 44 percent from December 2005.”

“The once white-hot condo market saw few sales in December, with only 10 townhomes and condos sold.”

“Local Realtors said they are unwilling to draw conclusions about whether the December figures represent a trend in the market, saying the number of sales is too small. Realtor Stephen Brighton said the weather was a factor in the small number of sales.”

“‘It is just hard to try a sell a home when it is snowing,’ said Brighton.”

The Review Journal from Nevada. “The housing slump in Las Vegas has been a tough pill to swallow for a lot of people and there’s no way to sugarcoat it, housing analyst Larry Murphy said Thursday.”

“Sales volume plummeted 45 percent in 2007 and median home prices declined for the first time since 1993. Businesses tied to the housing industry have seen sales and revenue drop by 40 percent, he said.”

“‘The good news is it won’t continue to get much worse,’ Murphy told about 500 real estate professionals attending his 2008 Crystal Ball seminar. ‘I think we are very near the bottom of the decline in prices.’”

“Murphy admitted he hasn’t always been right in his market assessments. After 40 percent appreciation in the first six months of 2004, Murphy said it couldn’t go on forever and correctly predicted that prices would plateau. What he did not see coming was another surge in prices in January 2005.”

“Now he sees another plateau, this time on the bottom side.”

“‘We’re pretty much right on track had none of this happened in 2004, 2005 and 2006,’ he said. ‘If you didn’t buy or sell a home during this period, if you owned in 2002, guess what? You’re right on schedule.’”

“The tightening lending market is jeopardizing the ownership of a multibillion-dollar hotel-condominium development under construction on the Strip.”

“The owner of the $3 billion Cosmopolitan confirmed that he received a notice of default from Deutsche Bank after payments on a $760 million construction loan came due.”

“Although Deutsche Bank and Merrill Lynch have approached MGM Mirage officials about the site, MGM Mirage President Jim Murren said gaming company isn’t interested in the Cosmopolitan project, at least for now.”

“‘It’s not something we’re looking at,’ Murren said. ‘We hope somebody can find a way of fixing this because it doesn’t help the Strip, Las Vegas or us to have a half-finished project sitting there.’”

In Business Las Vegas from Nevada. “Two of the top 20 builders in Las Vegas are in such a financial crunch that a guessing game has started as to which companies will be left standing in Southern Nevada by the end of this year.”

“Last week Tousa Inc., which operates in Las Vegas as Engle Homes, announced it has failed to make its semiannual interest payment due Jan. 15 on less than $200 million in principal and is considering options for restructuring the debt. The builder was ranked 18th in Las Vegas in 2006 with 375 sales.”

“‘I think you can take a list and put it up on the wall and throw darts at it and see who is going to be here next month,’ said Dennis Smith, president of HomeBuilders Research.”

“Something has to give in Las Vegas, said Tim Sullivan, president of Sullivan Group Real Estate Advisors. Housing starts are half the amount of two years ago, and in theory that means there should be half of the builders and half of the employees. There are problems because builders aren’t generating the sales needed to pay their land acquisitions debts, Sullivan said.”

“‘Those loans are being called due, and that is putting them in a position where they have to change their business significantly or go out of business,’ Sullivan said. ‘We are not going to see every builder go out of business, but some are going to leave the industry - that goes for public and private (companies) alike.’”

“Even builders in much better positions are laying off employees, a reflection of their financial woes. Pulte Homes laid off 50 employees in Las Vegas last week, sources familiar with the layoff said.”

“It’s a tough time for some to be an office building owner. Local brokerage CB Richard Ellis released its fourth quarter report showing the office market had a vacancy rate of 15.2 percent.”

“‘The underlying fundamentals of the Las Vegas economy remain strong, but the combination of the subprime crisis and overbuilding of office properties have created the perfect storm, causing substantial market softening,’ says Craig Shute, managing director of CB Richard Ellis’ Las Vegas office.”

“In 2007, 3 million square feet of space came on line, up from the 1.2 million Las Vegas averaged since 2000. That expansion isn’t expected to slow down this year with another 3 million square feet hitting the market.”

“Tenant concessions such as free rent and tenant improvement allowances will be at their highest level in 10 years, Shute says. As a result, that should help hold down construction during the next 12 to 18 months, he says.”

“Construction was the big job loser with employment falling 2,500 from October to November. The construction industry has lost 7,300 jobs in the past 12 months as the housing industry has shown no signs of improvement, the Nevada Employment, Training and Rehabilitation Department department reported.”

The Nevada Appeal. “Nevada’s housing trends closed out 2007 with some of the most dismal numbers in recent history, according to a report by RealtyTrac.”

“But there was some good news: The most recent foreclosure numbers, while increasing by about 200 homes on average from this time last year here, bumps Nevada down from the top spot to No. 2 in the nation. Colorado leapfrogged Nevada.”

“Local Realtors said they are not wholly laying blame on their counterparts in the lending industry. ‘I don’t think there’s any animosity toward (lenders),’ said Art Angelo, a Realtor who has been selling real estate in the area since 1980. ‘I think it’s a shame that some people got loans that shouldn’t have gotten a loan.’”

“‘You can’t blame it all on the lenders. Everybody got excited about owning their piece of the American Dream. If you look at it closely, these individuals thought their income would adjust to meet (the mortgage). It didn’t. I wouldn’t pile up on the lenders though - everyone piled up on the bandwagon,’ Angelo said.”

“That the housing inventory is being given time to ‘catch up’ to what the market will bear is a good thing, Angelo said, even though he shared empathy with those who make their living doing construction.”

“‘Essentially, we’re all in the same boat,’ he said. ‘When the industry’s down - it’s down across the board. I think the first six months of ‘08 will get even worse, until we absorb some of that housing inventory, but I think overall this will be a short-term trend. I think that you got to kind of hang in there and ride out the market. Real estate still is the best investment you have.’”

“Others decried the practices of predatory lenders within their field - especially upstarts in Southern Nevada.”

“‘I can’t speculate too much on what happened (in Las Vegas),” said Carson broker Debra Nevins. ‘But rumor has it there were many just horrible, horrible scams going on in Vegas. If those rumors are true, that greatly contributed to (foreclosure) numbers.’”

“‘Here in Northern Nevada, it’s a different kind of market, a different place. I do think we have some more of that down-home attitude,’ she said.”

The Dallas Morning News reports on Florida. “As I drive down U.S. 41, which connects Cape Coral, Fort Myers, Bonita Springs and Naples…the roads are still busy. The cars are still shiny. Massive new shopping centers greet the snowbirds, the early retirees setting up house and the usual vacationers escaping the cold of Minnesota, Michigan, Massachusetts and Maine. But something is wrong in paradise.”

“Last summer, everything seemed to stop. At the Florencia, the newest luxury tower, few purchases had been completed when the project was finished in the fall. Only a handful of units were sold in the last quarter. The downturn drove WCI close to bankruptcy.”

“On Jan. 8, WCI lowered prices dramatically at Florencia. A spectacular penthouse unit that was priced at $1.7 million on Jan. 1 can now be had for $1.3 million, a 24 percent drop. Discounts on other units range up to 40 percent.”

“According to Fort Myers MLS Board figures, it would take 44.5 months – nearly four years – to work off the current inventory of homes for sale. That doesn’t count the discouraged sellers who have taken their houses off the market but still want to sell.”

“The local News-Press regularly advertises auctions of homes built to sell for $250,000. The minimum bid: $50,000. Small condos are offered with opening bids of $25,000.”

“Over lunch, a Realtor tells me that those $250,000 houses are now selling for $100,000, when they sell at all. She also explains that most of the properties that are selling are ’short’ sales.”

“The Realtor herself fears becoming a victim. The blunt reality is that she is ‘upside down.’ Worse, she depends on scarce real estate sales for the income to pay the mortgage. Sadly, she is in the same position as the Texas condo slaves of the late 1980s.”

“According to www.realtor .com, Fort Myers has more than 12,000 listings, with nearly 2,000 available at $125,000 to $175,000. Many cost less than $100 a square foot.”

The Associated Press. “Places like Cape Coral went from southwestern Florida swampland to bustling bedroom community and one of the state’s centers of a building and buying boom. But now there is a sea of unsold homes and undeveloped lots in this 115-square-mile city.”

“‘It was very good before. It was like houses everywhere, buildings coming up everywhere, and all of a sudden everything stopped,’ said Elliot Aguilar, an electrician who lost his permanent job and is working a lower-paying temporary position. ‘If this continues, we probably have to move to another state.’”

“The slowdown is not just along the Gulf Coast. Across the state, people tired of hurricanes and high housing costs are reconsidering Florida.”

“Beth Mann lived in West Palm Beach until a year and a half ago, when her husband was offered a teaching job in Georgia. He took it — at a higher salary than he was paid in Florida — and they moved to Buford, Ga.”

“Their house is three times bigger. Their property taxes are 75 percent less. Their home insurance bill has been cut nearly in half. ‘We’re like, ‘Why didn’t we move sooner?’ she said.”

The Herald Tribune. “When the real estate market turned in 2006, the net migration fell by 100,000. Then for the year that ended in June 2007, it fell to 35,301.”

“‘The bad news is that a recession in the U.S. delays the workout of our real estate problem,’ said Brian Presley, a Punta Gorda-based financial adviser who manages hundreds of millions of dollars for wealthy investors. ‘If they can’t sell their home in Poughkeepsie, they are not going to buy in Punta Gorda.’”

“Bob Mikla is waiting for one or two of those boomers to show up and buy the luxury condominium that he has been baby-sitting since a late 2006 closing. He also would not mind getting a few more of them to loosen up their wallets and rent one of his limos.”

“The 46-year-old freely admits during a tour of his never-lived-in Rivo at Ringling condominium that his mid-life diversification plan has turned into a recipe for disaster. ‘I am getting nailed on every end,’ said Mikla, who has gradually lowered the price of the $780,000 unit to $610,000, holding an open house every Sunday.”

“He has made monthly payments of $3,500 on the condo ever since he closed: now $50,000 in carrying costs. ‘The reason I am not listed now, I am already losing money,’ he said. ‘If you put a Realtor fee on top of it, you are losing more.’”

“The limousine business he set up in Sarasota is struggling with the local economy. ‘December, which should have been a very busy month, turned out to be miserable,’ Mikla said. ‘People are cutting those services out because they don’t have the money. It is a luxury item.’”

“The median gain in value for a Sarasota home was $112,000 during the six-year period from Oct. 1, 2001, to Sept. 30, 2007. The comparable gain for a Midwest home was only $34,800. ‘Midwesterners would definitely experience sticker shock in the Sarasota market,’ said Walter Molony, a research analyst with the National Association of Realtors.”

“Mikla’s spacious three-two condo seems like it is priced to sell. His pre-construction price was $580,000 and he spent another $20,000 on upgrades. The problem is that his unit is one of many. More than 4,600 are for sale right now just in the Sarasota MLS; a three-year supply based on the current sales rate of 28 per week.”

“The city’s mood is a far cry from the heady days of the post-2000 building boom, when spirits soared along with economic prosperity and the population. Burglaries have nearly quadrupled in North Port, from 130 in 2001 to 466 last year, according to data compiled by the Florida Department of Law Enforcement.”

“Unemployment and financial stress have increased the sense of desperation in this community. While the housing bubble burst nationwide, North Port is a bedroom community and retiree haven that has little industry beyond construction. ‘People do crazy things when they they’re feeling like everything is crumbling around them,’ said Yvonne Parrish, a mother of five.”

“North Port resident Steve Crawford said he has three friends who moved away to find construction work after the housing downturn and another friend who ‘went right to alcohol and drugs.’ ‘The boom is over,’ said Crawford, a laid-off construction worker.”

The Miami Herald. “Justo Luis Fernandez isn’t feeling the urge to splurge amid the current economic gloom. The 53-year-old Miami car-rental agent expects to use money from the federal government tax rebate deal worked out last week for life’s basics.”

“‘I’d spend it on my household — on the things we need,’ Fernandez said. ‘Things are tight and pretty rough.’”

“‘I think things have changed for the worse [in recent weeks],’ said David A. Denslow, a University of Florida economist who thinks Florida’s housing downturn could drag on for a lengthy period.”

“Ask Richard Welch, a Miramar tax auditor, about the outlook and he’ll say ‘The worst is yet to come.’ He’s driving less and holding back on buying a flat screen TV and new computer to save money. And he doubts the stimulus package will be enough to get South Florida’s economy on track.”

“‘You’re going to see a lot of people lose jobs in the next eight to 12 months,’ he says.”

“Besides rising foreclosures, Welch says, many people are struggling with higher housing payments as adjustable rate mortgages reset to higher interest levels. ‘They’re not able to put that money towards restaurants and movies and to go shopping. That extra income is going to pay the mortgages. These are the homeowners who used to drive the economy.’”

“Many economists, like Henry Fishkind, say the region will power through the rough patch better than the nation and Florida overall.”

“‘We certainly have a housing recession, and we’re going to have a condo depression,’ Fishkind said. ‘But the general economic picture for South Florida is somewhat better than the nation and the state.’”

The Palm Beach Post. “So is Florida in a recession? With no guidelines for state or regional economies, the answer depends on which economist you ask.”

“No, says Sean Snaith, an economist at the University of Central Florida. ‘A pronounced slowdown? Absolutely. But I don’t believe recession is going to transpire,’ Snaith said.”

“Susan Jarrett disagrees. ‘You can see in the streets with the for-sale signs and closed businesses,’ says the retiree. And she expects it could take more than the president’s $150 billion economic stimulus plan to bring things around: ‘I think it will take 20 years for the economy to ever get back where it was.’”

“‘Everybody’s being affected by this economy,’ said Mildred Davila, a medical assistant who lives in Boynton Beach. ‘People don’t want to spend money.’”

“Local businesses and consumers are padlocking their pocketbooks, said Greta von Unruh, executive director of the Economic Development Research Institute, a nonprofit think tank in West Palm Beach. ‘We are clearly in a severe downturn.’”

“As for recession, ‘Is there any doubt?’ asked Paul Emmet, founder of Duffy’s Restaurants Inc. That’s not to say the chain is doing poorly. Just the opposite, said Emmet. But double-digit growth driven by housing sales has slackened, and established competitors such as RJ Gators have fallen by the wayside.”

“‘I don’t know about the rest of the country,’ says Duffy, ‘but Florida is clearly in a recession.’”

“After hitting record lows in 2005 and 2006, jobless figures are shooting upward in Palm Beach County and the Treasure Coast, according to the Florida Agency for Workforce Innovation. In December 2006, unemployed workers in the three counties numbered 26,638. But by last month, that figure had soared to 40,984, a 54 percent increase.”

“Sales of taxable goods ranging from clothes, cars and furniture to building materials and industrial supplies have been falling in Palm Beach County - and plummeting in the Treasure Coast.”

“It’s no secret that home prices have fallen, but figures released Thursday by the Florida Association of Realtors show just how serious the housing correction has been.”

“The median price for a single-family home in Palm Beach County fell from $421,500 in November 2005 to $337,900 in December 2007, a 20 percent decline. And in the Treasure Coast, the median dropped from a peak of $269,400 in September 2005 to $196,800 last month, a 27 percent correction.”

“Nearly 5,000 St. Lucie County households defaulted on their mortgages in 2007. Palm Beach County’s foreclosure rate skyrocketed to one for every 45 households in 2007. In some neighborhoods, such as Thousand Oaks in Riviera Beach, multiple houses on the same street slipped into foreclosure.”

The Northwest Florida Daily News. “The housing market in Okaloosa County is not expected to bottom out until the summer of 2009, according to a December 2007 study by Moody’s Economy.com.”

“‘These forward-looking projections are based on past trends,’ said Rick Harper, director of the Haas Center for Business Research and Economic Development at the University of West Florida. ‘The study does not capture the influx due to BRAC (Base Realignment and Closure).’”

“‘Those new folks who are coming in, they and their households will need homes to live in,’ said Harper. ‘I think they’re wrong.’”

“Realtor Diane Keller agreed and blamed the Destin market for much of the bleak forecast. ‘Destin built a lot of houses with nobody to live in them,’ said Keller. ‘At some point there has to be an end user. Someone has to live there and work in the community … for the market to stabilize.’”

“She said she has recently seen houses less than $200,000 in Fort Walton Beach — her primary sales area — selling fairly well. ‘Destin can’t supply that,’ she said. ‘Destin’s houses are too expensive.’”

“Another challenge facing the area is that sellers still refuse to acknowledge how far prices have already dropped, real estate agents say.”

“‘Probably 60 percent are still living in that 2004 mentality,’ said Realtor Debbie Gericke. ‘And you’re doing damage to a home by keeping it overpriced in a market that’s overcrowded.’”

“Gericke said she’s looking to a successful tourism season to boost the local economy and work through some of the excess property on the market. ‘People need and desire to own a home,’ she said. ‘If there’s no water in Atlanta this summer, then where are they going to come? We still have a lot of unrealistic sellers out there, but there are some good deals.’”

“Although Harper disagrees with Moody’s long-term assessment of the Okaloosa market, he does not dismiss concerns about plummeting prices. He warns that Florida must restore affordability and keep the area’s popularity from sagging.”

“‘I think 2008 will be an extremely difficult year,’ he said. ‘If Florida is not successful in fixing windstorm insurance or property taxes … then this (study) is a reminder of what the future housing market could look like.’”

What do you see in your local housing market this weekend? Marketing plans? “With Florida’s real estate market reeling, brokers in Miami increasingly are targeting wealthy New Yorkers as a potential new audience to buy their unsold properties. With more than 22,000 condo units that need to be absorbed, supply in Miami has overwhelmed demand, and prices are being cut substantially.”

“‘Florida is on sale right now,’ the president of Miami-based Majestic Properties, Jeff Morr, said. A few years ago, Mr. Defortuna said: ‘We almost didn’t have to market to people. Now, the buyers are more scarce.’”

“With home foreclosures at a 20-year record high in California and up 68 percent nationwide, foreclosure bus tours in which home buyers visit a number of foreclosed properties in one outing, are popping up across the country.”

“At one tour in Pismo Beach, Calif…Mike and Mary Hays, were looking for their dream home. One house they saw sold for $450,000 three years ago. Now the bank owns it, but it could be Mike and Mary’s for $318,000.”

“‘It’s sad, but everyone is looking for a bargain,’ said Jim Fisher, another prospective buyer. ‘You don’t know the circumstances of why it’s a bargain, but it is.’”

Or auctions? “An auction for discount-priced new homes will offer three St. Cloud houses, auction organizers said. More than 200 new homes around Minnesota will be sold at the auction, said Lisa Berry, a spokeswoman for Norman Mitchel International.”

“Construction companies have an abundance of inventory because of a nationwide housing slump. ‘These builders need to get rid of their products,’ she said.”

Or builder woes? “Housing statewide has taken a hit, according to Maine Municipal Association Communications Director Mike Starn. ‘From a statewide perspective, (Sidney’s housing crunch) is certainly not a unique phenomenon,’ Starn said.”

“‘There’s a couple of contractors in town that have had spec houses on the market for upwards of two years,’ said Code Enforcement Officer Gary Fuller. ‘I don’t think it has anything to do with the town of Sidney. I also work in the town of Belgrade, and it’s also happened there. I just think the housing market is in a slump.’”

“At the market’s peak, builders churned out more than 12,000 new homes a year in central Indiana.”

“In the current slump, new-home production has dropped to fewer than 7,000 per year, leaving builders with no choice but to slash prices, eliminate hundreds of jobs, and look to unload huge chunks of office space.”

“‘I wish I had seen this coming in 2004 and 2005,’ said Brad Davis, the Davis Homes LLC’s CEO. ‘No one saw it coming then. We all saw a softening in June 2006. The first few months of 2007, we had fairly decent sales. In May and June, the market took a huge turn for the worse.’”

Or foreclosures? “Linda Caoli helps lots of families on the verge of losing their homes, including a single mom working two jobs to pay her mortgage. ‘She says Linda the house across the street, same model, with more upgrades sold in foreclosure for $315,000!’ explains Linda.”

“Her client isn’t the only one thinking about ditching her house to buy the better deal across the street. ‘Can you imagine if you had a same or similar home and your mortgage was half the price?’ asks Linda.”

“Caoli is sympathetic, but she doesn’t endorse the practice of it. Other real estate agents we talked to were far more critical, calling them cheaters.”

“‘Is it wrong to steal when you’re hungry? That’s an issue that a lot of people are trying to figure out right now,’ says Linda.”

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